6.5.1 Recent advances in potential estimations from around the world

Chapter 3 of the TAR (IPCC, 2001) provided an overview of the global GHG emission reduction potential for the residential and commercial sectors, based on the work of IPCC (1996) and Brown et al. (1998). An update of this assessment has been conducted for this report, based on a review of 80 recent studies from 36 countries and 11 country groups, spanning all inhabited continents. While the current appraisal concentrates on new results since the TAR, a few older studies were also revisited if no recent study was located to represent a geopolitical region in order to provide more complete global coverage. Table 6.2 reviews the findings of a selection of major studies on CO2 mitigation potential from various countries around the world that could be characterized in a common framework. Since the studies apply a variety of assumptions and analytical methods, these results should be compared with caution (see the notes for each row, for methodological aspects of such a comparison exercise).

According to Table 6.2, estimates of technical potential range from 18% of baseline CO2 emissions in Pakistan (Asian Development Bank, 1998) where only a limited number of options were considered, to 54% in 2010[9] in a Greek study (Mirasgedis et al., 2004) that covered a very comprehensive range of measures in the residential sector. The estimates of economic potential[10] vary from 12% in EU-15 in 2010[11] (Joosen and Blok, 2001) to 52% in Ecuador in 2030[12] (FEDEMA, 1999). Estimates of market potential[13] range from 14% in Croatia, focusing on four options only (UNFCCC NC1 of Croatia, 2001), to 37% in the USA, where a wide range of policies were appraised (Koomey et al., 2001).

Mainly fuel switch in water and space heating, hot water efficiency and the multi-residential retrofit program in households; landfill gas, building shell efficiency actions and fuel switch in commerce.

9 Main technological options: energy efficient appliances such as refrigerator and air conditioners, lights (shift from incandescents to fluorescents), kerosene, electricity and gas water heater, kerosene and gas heater, wall and window insulation and others.

1. Discount Rate (DR) belongs to the interval [3%; 10%]. 2. Most models are Bottom-up (BU). 3. All models consider CO2. If a study considered GHGs, CO2 only was analysed, if the study assessed C, potential was converted into CO2. 4. Baseline (BL) is Business-as-Usual Scenario (BAU) or similar (Frozen efficiency scenario is abbreviated as fr-ef). 5. Base year (BY) is 2000; Target year (TY) is 2020. 6. Costs covered: cost of incremental reduction, abatement costs, costs of avoided or saved or mitigated CO2, marginal costs. 7. Estimations are made for Residential (R) and commercial (C) sectors in sum.

Our calculations based on the results of the reviewed studies (see Box 6.1) suggest that, globally, approximately 29% of the projected baseline emissions by 2020[14] can be avoided cost-effectively through mitigation measures in the residential and commercial sectors (high agreement, much evidence). Additionally at least 3% of baseline emissions can be avoided at costs up to 20 US$/tCO2 and 4% more if costs up to 100 US$/tCO2 are considered. Although due to the large opportunities at low-costs, the high-cost potential has been assessed to a limited extent and thus this figure is an underestimate (high agreement, much evidence). These estimates represent a reduction of approximately 3.2, 3.6 and 4.0 billion tonnes of CO2-eq in 2020, at zero, 20 US$/tCO2 and 100 US$/tCO2, respectively. Due to the limited number of demand-side end-use efficiency options considered by the studies, the omission of non-technological options, the often significant co-benefits, as well as the exclusion of advanced integrated highly efficiency buildings, the real potential is likely to be higher (high agreement, low evidence). While occupant behaviour, culture and consumer choice as well as use of technologies are also major determinants of energy consumption in buildings and play a fundamental role in determining CO2 emissions, the potential reduction through non-technological options is not assessed. These figures are very similar to those reported in the TAR for 2020, indicating the dynamics of GHG reduction opportunities. As previous estimates of additional energy efficiency and GHG reduction potential begin to be captured in a new baseline, they tend to be replaced by the identification of new energy-efficiency and GHG-mitigation options. For comparison with other sectors these potentials have been extrapolated to 2030. The robustness of these figures is significantly lower than those for 2020 due to the lack of research for this year. The extrapolation of the potentials to the year 2030 suggests that, globally, at least 31% of the projected baseline emissions can be mitigated cost-effectively by 2030 in the buildings sector. Additionally at least 4% of baseline emissions can be avoided at costs up to 20 US$/tCO2 and 5% more at costs up to 100 US$/tCO2 (medium agreement, low evidence)[15]. This mitigation potential would result in a reduction of approximately 4.5, 5.0 and 5.6 billion tonnes of CO2-eq at zero, 20 US$/tCO2 and 100 US$/tCO2, respectively, in 2030. Both for 2020 and 2030, low-cost potentials are highest in the building sector from all sectors assessed in this report (see Table 11.3). The outlook to the long-term future assuming options in the building sector with a cost up to 25 US$/tCO2 identifies the potential of approximately 7.7 billion tonnes of CO2 in 2050 (IEA, 2006d).

Box 6.1: Methodology for the global assessment of potentials and costs of CO2 mitigation in buildings

This chapter evaluated the potential for GHG mitigation in buildings and associated costs based on the review of existing national and regional potential estimates. For this purpose, over 80 studies containing bottom-up mitigation potential estimates for buildings were identified from 36 countries and 11 country groups covering all inhabited continents. One study (AIM, 2004) covered the entire planet, but it was not suitable for the purposes of this report, as it assessed a very limited number of mitigation options.

To allow the comparison of studies in a common framework, their main results and related assumptions were processed and inserted into a database containing the key characteristics of the methods used and results. To eliminate the major effects of different methodological assumptions, only those studies were selected for further analysis whose assumptions fell into a range of common criteria. For instance, studies were only used for further assessment if their discount rates fell in the interval of 3–10%. For studies which did not report their baseline projections, these were taken from the latest available National Communications to the UNFCCC, or other recent related reports.

Table 6.2 presents the results of a selection of major mitigation studies meeting such criteria for different parts of the world. For definitions of various mitigation potentials see Chapter 2, Section 2.4.3.1.

The next step was to aggregate the results into global and regional potential estimates, as a function of CO2 costs. Only three studies covered a 2030 target year and they were for countries with insignificant global emissions, thus this was only possible for 2020 in the first iteration. Since few studies reported potentials as a function of cost (typically only technical/economic or market potentials were reported), only 17 studies from the remaining subset meeting our other selection criteria could be used. IPCC SRES or WEO scenarios could not be used as a baseline because little information is available for these on the technology assumptions in buildings. In order to make sure the potentials are entirely consistent with the baseline, an average baseline was created from the studies used for the global potential estimates. For the global potential estimates and the baseline construction, the world was split into seven regions[16]. For each such region, two to four studies were located, thus dividing each region into two to four sub-regions represented by these marker countries in terms of emission growth rates and potential as a percentage of baseline. CO2 baseline emissions in the seven regions were estimated starting with 2000 IPCC A1B and B2 (SRES) data and applying the CO2 growth rates calculated for each region as the population weighted average CO2 baseline growth rates of two to four sub-regions. The baseline projections were estimated for 2000–2020 based on mainly 2020 data from the studies; these trends were prolonged for the period 2020–2030. Since three of the seventeen studies used a frozen efficiency baseline, the baseline used in this chapter can be considered a business-as-usual one with some frozen efficiency elements. The resulting baseline is higher than the B2 (SRES) scenario but lower than A1B (SRES) and WEO scenarios.

Analogously, CO2 potentials as a percentage of the baseline in cost categories (US$/tCO2: (<0); (0;20); (20;100)) were calculated based on population weighted average potentials in the sub-regions for each cost category .While the three studies using a frozen efficiency baseline result in a relatively higher potential than in studies using a BAU baseline, this does not compromise the validity of the global potential, since for the regions applying a frozen efficiency baseline, the latter baseline was used in calculating the global total. The results of these estimates are presented in Table 6.3.

As mentioned above, only three studies covered the baseline or mitigation potential for 2030. Therefore these figures were derived by extrapolating the 2020 figures to 2030. Since the simple exponential formula used for such extrapolations by other sectors was found to yield disputably high or low results in some cases, a modified exponential function was used which allows regulating the maximum potential considered theoretically achievable for different regions[17]. The results of the projections are presented in Table 6.4

The literature on future non-CO2 emissions and potentials for their mitigation have been recently reviewed in the IPCC/TEAP report (2005). The report identifies that there are opportunities to reduce direct emissions significantly through the global application of best practices and recovery methods, with a reduction potential of about 665 million tonnes of CO2-eq of direct emissions in 2015, as compared to the BAU scenario. About 40% of this potential is attributed to HFC emission reduction covered by the Kyoto Protocol to the UNFCCC, while HCFCs and CFCs regulated by the Montreal Protocol contribute about 60% of the potential. A key factor determining whether this potential will be realized is the costs associated with the implementation of the measures to achieve the emission reduction. These vary considerably from a net benefit to 300 US$/tCO2-eq. Refrigeration applications and stationary and mobile air conditioning contribute most to global direct GHG emissions. Action in these sub-sectors could therefore have a substantial influence on future emissions of HCFCs and HFCs. The available literature does not contain reliable estimates for non-CO2 mitigation potentials in the long-term future, including the year 2030. Therefore, the 2015 figures can serve as low estimates of the potentials in 2030, taking into account that upcoming progressive policies in many countries have already led to new products with very low non-CO2 emissions as compared to their previous analogues.

^ If the approx. formula of Potential 2020 = 1 - ( 1 - Potential 2010)20/10 is used to extrapolate the potential as percentage of the baseline into the future (2000 is assumed as a start year), this corresponds to approx. 78% CO2 savings in 2020.

^ In this chapter we refer to ‘cost-effective’ or ‘economic’ potential, to remain consistent with the energy-efficiency literature, considering a zero-carbon price.

^ Corresponds to an approx. 22% potential in 2020 if the extrapolation formula is used.

^ Corresponds to an approx. 38% potential in 2020 if the formula is applied to derive the intermediate potential.

^ X (t) = Xsaturation –C e –kt (reached from the differential equation: dx/dt = k (Xsaturation–x), saturation illustrates that the closer potential is to this upper limit, the lower potential growth rate is experienced, and the potential does not exceed the maximum judged reasonable. C can be found from the starting conditions (in year 2000); thus if we know the potential in 2020, then: